The following are the standard documents required for JV & Equity finance:

• KYC: ID, Address proof, Personal & Professional History, and credit report for all the Borrower, Director, Partners & Major Shareholders
• SPV: Structure, Directors, Shareholders, UBO, and registered address
• Money Laundering Documents: Assets & Liability Statements, Income & Expenditures Statements, Equity (deposit) proof
• Income proof (may be required): Last 3-year accounts/tax return, 3 Month Bank Statements (Personal & Business)
• Collateral: Full descriptions, brochure, valuation report (if available), tenancy schedule (if applicable)
• Purpose:  Purchase, Refinance, Restructure, Investments, Developments, Business purpose, Refurbishments

Can You Offer 100% Development Finance Without A Profit Share?

Yes, it is possible to take out development finance without putting down a deposit or profit-sharing with a joint venture partner.

In order to do this, you would be expected to provide additional security in lieu of a deposit by way of a charge over another property, or properties. This could be your own home, investment properties, or even land that is to be used for future developments.

100% funding without additional security will always result in a profit share.

Do I Qualify?

In order to qualify, you will need to meet the following criteria:-

• Be an experienced developer – this means you will have completed at least one development of a similar scale to the one you’re proposing.
• Have a profitable scheme – in excess of 20%, but ideally with a margin of over 30%.
• Your project has full planning permission in place.
• The gross development value is at least £1,000,000.

How Does it Work?

The property will be placed in a special purpose vehicle (SPV). The SPV will usually be owned by the funder, with a guarantee in your favor.

The Benefits of Joint Venture Development Finance

Using a JV development finance lender instead of using your own funds allows you to develop quickly without having to tie up your own funds. By taking this route, although profits are shared, more projects can be taken on, meaning your potential profit can actually grow.

By taking on an SPV with the lender, you would also save significantly on legal fees, with only one set of legal fees being payable.

Where projects are located nearby, cost savings can be made by sharing resources between your sites.

How Are Joint Venture Development Finance Applications Assessed?

Joint venture property development lenders are taking all of the financial risks of the application and will want to see a reward for doing so. As such, applications are subject to strict underwriting on the following basis:

• Experience: This is crucial, as lenders want to ensure you have a track record of delivering the sort of scheme you are looking to build out.
• Profit: Funders will assess the likely profit in two ways:
  • Firstly, they will judge the uplift in the total cost of at least 30% for the scheme to be viable. It goes without saying, but the higher the margin, the more attractive the proposal.
  • Secondly, potential JV partners will generally only get involved in sites with a GDV over £1m. Sites above £2,000,000 tend to be the most attractive due to the increased potential profit.
• Exit: Another key point is exiting the loan. The demand must be strong for the finished units. Your scheme must be able to demonstrate saleability. The location of the site tends to go hand in hand with this point.

What Information Will I Need to Supply?

In order to assess a potential application, we usually need to see the following information:-

• A fully completed proposal form (get in touch and we can send you one).
• Your development CV.
• A detailed schedule of works.
• A detailed schedule of costs.
• A full copy of planning permissions (or a link to the planning portal showing permissions).
• Detail around the end value of the scheme.

Profit-Sharing

100% development finance is offered on a profit share basis, with an agreed split on completion shared.

The following costs should be considered at the time of availing the JV & Equity Finance:

• Arrangement Fee: The arrangement fee or the facility fee, is usually charged by the lender as a set-up fee for the loan
• Exit Fee: The fee is payable to the lender when repaying the loan
• Broker Fees: These are the fees payable to the Broker for finding the best lenders and managing the application to completion
• Valuation Fees: This is the fee that has to be paid to the valuer, who shall be instructed by the lender to furnish a report on the collateral/project
• Legal Fee: Usually, the borrower would have to pay the legal fee for their own solicitors as well as the lender’s solicitors fee

We always aim to bespoke the ‘Financing Time Plan and Finance T & C, to meet the individual requirement. Our standard indicative timeframe :

• Initial Finance Terms: We usually provide Initial Finance Terms within 24-48 hours.
• Emergency Finance:  We can complete the finance within 48 hours in case of any emergency or distressing situation.
• Standard Finance:   We usually complete Standard Finance within 4-6 weeks.

Notes: Financing time frame & Finance T &C are always subject to providing all satisfactory documentation, full credit underwriting,  valuation and legal.

Please refer to the Knowledge Bank section for more information